Lula’s trip to China seeks to increase weight of agriculture in Brazil’s exports

The visit of the Brazilian delegation to China has the potential to leverage the relationship between agribusiness in Brazil and the Asian country — said the chairman of the Committee on Agriculture, Livestock, Supply and Rural Development of the Brazilian Congress, Tião Medeiros.

“China is a strategic partner, not only as a buyer of Brazilian goods, but also as a supplier of inputs, equipment, and technologies. So, this is the kind of partnership that must be nurtured. I have high hopes for this mission,” the congressman said.

The Asian country has been the leading destination for Brazilian agribusiness exports for almost ten years. In 2022, China had a 31.9% share in the value of Brazilian shipments, totaling US$ 50.79 billion.

According to the director of international relations at Brazil’s Confederation of Agriculture and Livestock (CNA), Sueme Mori, there is “enough room” for growing bilateral trade between Brazilian agriculture and China, but — like the parliamentarian — he said he believes that this partnership can be extended to other fields.

Sueme Mori, a member of the Brazilian delegation that traveled to China, highlights the mission’s potential to promote advances in technical and scientific cooperation and create a plain-level field to defend issues of mutual interest on international dialogue platforms.

“China is Brazil’s main agricultural partner, and this presidential visit has enough potential to bring the relations between the two nations up a notch. It is truly deferential for a head of state, such as a president of the Republic, to go to another country, as is the case with Lula,” he says.

“From a practical point of view, [the mission] helps to speed up negotiations. For example, when complex negotiations are stalled for years, and you have an upcoming high-level mission, it is normal to speed up the talks beforehand so you can use the official agenda to announce agreements, market openings, joint projects, etc.,” commented him.

The entourage from the Ministry of Agriculture and Livestock (MAPA) returned to Brazil on March 29, having completed the trip on the initially planned date before Lula’s diagnosis of pneumonia. Minister Carlos Fávaro celebrated the Sino-Brazilian “affectionate and fruitful relationship” and provided an overview of the trip at an event attended by government and business officials from both countries.

According to Fávaro, one of the wins took place on the very first day in Beijing: the lifting of the 29-day embargo on Brazilian beef. The halt had initiated in February when an isolated and atypical case of “mad cow” disease was confirmed in the state of Pará.

Another highlight was the new export licenses received by four new meatpackers and the rehabilitation of another two, which had had their activities suspended. “Today, more than 50 plants are registered with the Chinese government for evaluation. So opportunities exist, and I am confident that more products will be traded with China,” he said, referring to progress in negotiations for cotton, corn, fresh grapes, pecans, sorghum, and sesame.

The delegation also received a letter from the General Administration of Customs of China (GACC), recognizing the Brazilian agricultural defense system’s quality, security, and credibility. “For us, it was a reason for great pride and strengthening of our partnership,” said the minister.

The expectation is that Lula will sign at least four long-awaited agreements, including a digital certification to reduce bureaucracy for Brazilian exporters and a deal that allows trade using real and the Chinese yuan, removing the dollar from the equation.

Most exported products

Six of the ten most exported products by Brazilian agriculture in 2022 had China as their leading destination: soybeans, fresh beef, fresh chicken, pulp, raw sugar, and cotton.

Congressman Tião Medeiros points out that China’s “immense and growing demand for food” makes Brazil a “strategic partner” for the country. “We are a large supplier, capable of meeting this demand. So Brazil is a strategic partner from a geopolitical point of view.”

At the top of Brazil’s export list, soy accounted for 46% of all Brazilian international sales in 2022. Fresh beef, third in the ranking, accounts for 11.8% of the total — which demonstrates the importance of the resumption of product sales to China, one of the trip’s objectives.

The increase in soybean sales to China reflects the Asian country’s growing importance in Brazilian exports. If the product now accounts for nearly half of the sector’s exports, it was only 17.4% in 2012.

According to the CNA director, there is room for advancements in negotiating other products. Among them, corn stands out, which is currently the second most important for Brazilian exports, with 12.1% of the total value.

The agriculture commission’s head reiterates corn’s potential for the future Brazilian exports. “Corn, like soybeans, has a lot of potential because it has multiple uses. It can be used as animal feed, but it can also be a strategic supplier of ethanol, a corn-based fuel,” he explained.

Please see below the top 10 containerized exports from Brazil to China shipped last year, according to DataLiner.

Top 10 exports to China | Jan 2022 – Dec 2022| TEUs

Source: DataLiner (click here to request a demo)

Brazil-China partnership strengthened over the last decade 

Brazil saw China become more important for its exports in the last decade. In 2012, the Asian country accounted for 18.8% of all operations, trailing only the European Union (EU).

As of 2013, the value of exports to China exceeded those with the EU — thus, the Asian country rose to the top of the list, where it has not left so far. In 2018, the value of exports to China reached 35% of the total registered by Brazil.

According to Sueme Mori, the main reason behind the approximation of the two countries is the process of trade opening in the Asian nation. “The critical question is how China will open. She notes that China’s decision to open its market to the rest of the world was crucial.

Strengthing ties

Both the CNA director and the congressman see technological and scientific cooperation as one of the ways to grow the relationship between Brazilian agribusiness and the Asian country.

“China frequently discusses boosting domestic production through investments in technological research and rising productivity. Brazil’s path is also moving in this direction. Therefore, I believe that the exchange and cooperation in agricultural research can be very beneficial,” concludes Sueme Mori.

“The purpose of the trip is to strengthen partnerships, but above all, to open new markets. But it is also important in terms of technology. China is a very advanced technological park, and Brazil is not keeping up with this speed. That is why this exchange is vital,” points out the deputy.

Another possibility entailed by the trip is aligning policy advocacy.

“This term refers to issues of shared interest on forums for international dialogue. Think about discussing protectionist policies, climate change, and food security openly with China. We can use this more, given the size of the two nations.”

Source: CNN

To read the original news report, see: https://www.cnnbrasil.com.br/economia/viagem-de-lula-a-china-busca-ampliar-peso-do-agro-nas-exportacoes-do-brasil/

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